POLITICS

White House Hints At Way Around Obamacare Individual Mandate

10/22/2013 12:19 pm ET | Updated Oct 22, 2013

Americans anxious they'll get fined for not having health insurance because they can't buy any on Obamacare's broken website might be in for some relief.

The health care reform law, known as the Affordable Care Act, may provide President Barack Obama's administration with a way to shield people from the law's individual mandate tax penalties, White House press secretary Jay Carney hinted Monday.

"The law is clear that if you do not have access to affordable health insurance then you will not be asked to pay a penalty," Carney told reporters after Obama addressed the ongoing technological difficulties hampering enrollment into insurance via HealthCare.gov. The site is the online portal for Obamacare in more than 30 states. Carney referred reporters' additional questions to the Department of Health and Human Services, which declined to provide comment on the record.

The individual mandate plays a crucial role in the construct of the Affordable Care Act's new health insurance exchanges because it pressures people to buy coverage before they get sick. This ensures that healthy people pay into the insurance pool to help cover the cost of treating sick people, and that uninsured people who become ill or get injured don't stick medical providers with unpaid bills, which in turn raises costs for taxpayers and health insurance customers.

The ongoing problems with HealthCare.gov, however, raise questions of fairness: Why should individuals be penalized for not having health insurance when it's not their fault that the health insurance exchanges are making it very difficult to apply for financial assistance and to sign up for a health insurance plan?

Republican lawmakers have used the website's problems as a new justification for their push to delay the individual mandate, an idea that the administration has rejected.

There could be another way out. The Affordable Care Act includes language providing the administration with broad authority to specify who can avoid the mandate because of hardship, which the law describes as "an individual eligible for a hardship exemption, such information as the Secretary shall prescribe."

The Centers for Medicare and Medicaid Services have used that discretion to include a slew of circumstances, like someone being evicted from his or her home, having a close family member die, or suffering a natural disaster. Already, poor people who live in states that aren't expanding Medicaid under Obamacare -- which is a result of the Supreme Court ruling last year that allows states to opt out, not of any language in the law -- have been exempted from the individual mandate.

Carney suggested as much Monday: "The law makes clear that people who do not have access to affordable care due to a state not expanding Medicaid or other factors will not be penalized."

The Affordable Care Act also spells out a few specific exemptions from the individual mandate, including people with religious objections to health insurance, Native Americans and people who don't earn enough money to pay federal income taxes. Individuals and families aren't subject to the penalties if they are uninsured for three months or less. At present, however, the administration has not created an application process for individual mandate exemptions.

The individual mandate, called the "individual responsibility requirement" in the Affordable Care Act, is arguably the most controversial element of the law, and polls show it's the least popular. This mandate was the chief reason for the legal challenges brought by states that ultimately led to the Supreme Court upholding the law last year.

Under the health care reform law, nearly all legal U.S. residents are required to obtain health coverage or face tax penalties. Next year, the penalty for a single is $95 or 1 percent of income above $10,000, whichever is higher. The cost of going uninsured by choice increases in future years until it reaches $695 or 2.5 percent of income in 2016, after which it will rise with inflation.

The White House insists that HealthCare.gov will be fixed soon enough that uninsured Americans and those who don't get health benefits at work shouldn't worry about being able to enroll in health insurance. Obama promised the website would be functional soon, but didn't say when or what his administration is doing to fix it.

Consumers have until Dec. 15 to enroll in health coverage that will be in place on Jan. 1. The enrollment period runs until March 31, and people need to have a health plan by Feb. 15 to avoid paying a portion of the individual mandate penalty.

The administration also appears to be looking for ways to address that gap between Feb. 15 and March 31, Carney said. "There's a disconnect between open enrollment and the individual responsibility timeframes in the first year only, and those are going to be addressed," he said. The Department of Health and Human Services will issue legal guidance on this issue soon, an official said.

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